Lawsuits against companies crop up every day. Surprisingly, it is the small businesses that are mostly affected. Blame it on ignorance or limited resources but the fact remains that small businesses are struggling with lawsuits day in day out.
Most small business owners will underestimate the importance of, for instance, a cyber security lawyer or data breach lawyer California until they fall prey to unscrupulous hackers who steal or destroy private client information.
On that note, below are the common lawsuits you will find filed in our courts against businesses especially small and medium enterprises.
Employment discrimination and wrongful termination
The number of cases filed against companies for employment discrimination and wrongful termination is skyrocketing. The reason being, some various anti-discrimination laws, and acts protect employees.
Some of these acts include:
Title VII of the Civil Rights Act that prevents employers from discriminating against employees based on their sexual orientation, nationality, race, color or religious beliefs.
Pregnancy Discrimination Act: This is self-explanatory.
Equal Pay Act: This act requires employers to give equal remuneration to both female and male employees if they perform equal work and work in the same environment.
Age Discrimination in Employment Act: This act favors the elderly. It states that no employers will discriminate employees aged 40 and above based on their age.
Title I of Americans with Disabilities Act (ADA): Prohibits an employer from discriminating against qualified personnel who suffer from any form of disability.
The reason why small businesses are mostly affected by this is that they have not employed human resource professionals and open source counsel. Additionally, they are not keen on understanding federal and state laws in regards to employment.
Violation of wages
There are instances where an employee will claim that the company they work for has been paying them unjustly. In most cases, it is an honest mistake on the side of the employer. However, the court does not lessen the settlement whether it was an oversight or otherwise.
Most of these wage suits are based on the claim that the employer refused to pay their minimum wage and sometimes their overtime pay. As such, employers should make it their duty to ensure their employees are paid as they should since insurance policies do not cover such suits.
A tort is a suit that seeks compensation based on the infringement of a person’s civil rights. Most of these suits are filed by third parties.
There are two types of torts; intentional torts and unintentional torts brought about by negligence. An example of an intentional tort is the wrongful arrest of someone while an unintentional suit may be due to an employee’s negligence that would cause injury to a third party or destruction of property.
However, insurance companies offer businesses general liability policies that would cover an injury or property damage claim.
Breach of contract
Another common cause for business lawsuits is a breach of contract. When an employer fails to meet the terms of a binding contract between them and another company or a third party, they are subject to being sued. Most business liability insurance policies will not cover claims solely based on breach of contract. Business owners should do anything in their power to avoid business lawsuits. This is because they are tied to hefty fines, are incredibly embarrassing and